The Ministry of Health has responded to growing public complaints and campaigns on social media over the misuse of billions of shillings allocated to the Social Health Authority (SHA), allegedly channelled to non-existent health facilities and hospitals with conflicting ownership.
In a statement issued on Monday, Health Cabinet Secretary Aden Duale detailed the current status of claims submitted under the Social Health Insurance Fund (SHIF) and the Primary Healthcare Fund (PHC), outlining payments made, rejections, and investigations.
The Ministry noted that fraudulent practices in the healthcare sector were a growing global challenge, accounting for up to 15 per cent of expenditures. In Kenya, the Association of Kenya Insurers (AKI) estimates that 30 per cent of medical payouts are linked to fraudulent claims.
Duale stated that since assuming office on April 1, 2025, his ministry has intensified the war against fraud through the introduction of a comprehensive digital system, revealing that the system uses artificial intelligence to flag irregularities and detect anomalies throughout the claims process.
Closure of Facilities
According to the CS, the crackdown has already seen the closure of 728 non-compliant facilities and the downgrading of 301 others by the Kenya Medical Practitioners and Dentists Council (KMPDC). In June, SHA also suspended 40 facilities following forensic audits and announced plans to degazette an additional 45 flagged for fraudulent activities.
According to him, the efforts saw claims worth Ksh10.6 billion rejected due to fraudulent activities or non-compliance.
''Claims worth Ksh10.6 billion have been rejected due to fraudulent activities or non-compliance. This action is taken under the authority of Section 48(5) of the Social Health Insurance Act, 2023, which outlines penalties for providers who knowingly or fraudulently alter information to defraud the Authority,'' CS Duale noted.
He admitted that investigations have uncovered disturbing trends, including upcoding, falsification of medical records, converting outpatient visits into inpatient admissions, and phantom billing for non-existent patients.
''The primary function of our digital system is to detect fraud. We have seen that facilities are looking for innovative ways to cheat the system, but our digital architecture is designed to detect and flag anomalies at every stage of the claims process,'' Duale added.
''Our intensified war against fraud resulted in the closure of 728 noncompliant facilities and the downgrading of an additional 301 facilities by the Regulator KMPDC, as noted in my press statement on 30th June.''
Flagged Hospitals
He added that specific facilities have already been implicated. Nabuala Hospital in Bungoma was cited for falsified claims involving multiple Caesarean sections on the same patient, while Kotiende Medical Centre in Homa Bay submitted fabricated documents with the same medic signing off for both day and night shifts.
In Nairobi, Vebeneza Medical Centre was flagged for converting outpatient visits into inpatient claims, while Jambo Jipya Hospital in Mtwapa was found to have submitted fraudulent Caesarean section claims for a normal delivery.
In Mandera, a group of facilities, including Al-Masry Nursing Home, Care Connect Hospital, and Zamzam Nursing Home, was accused of colluding to submit 312 fraudulent claims for patients allegedly admitted on the same dates across multiple hospitals.
The hospitals are yet to respond to the accusations as the investigations into the allegations continue.
Claims Submitted
Meanwhile, according to the Ministry, facilities under the Primary Healthcare Scheme (PHS) submitted claims worth Ksh9 billion, of which Ksh7.7 billion has already been paid. The balance will be cleared in the next cycle.
Under the SHIF, health facilities submitted claims totalling Ksh82.7 billion. Out of this, Ksh53 billion has been paid, Ksh6.4 billion has been approved and is awaiting disbursement, and Ksh10.6 billion worth of claims were rejected due to fraud and non-compliance.
An additional Ksh3 billion worth of claims are under re-evaluation due to missing documentation, while Ksh2.1 billion are being investigated for possible fraudulent activity. Claims worth Ksh7.6 billion for the month of August are also under review.
